MIND THE GAP – RENEWAL JUDGMENTS UNDER CPLR § 5014

• Posted on: Feb 14 2020

In New York State, money judgments are valid for 20 years.  CPLR § 211(b).  Money judgments recorded in the county in which real property is located remain liens on that real property for only 10 years.  CPLR § 5203(a).  The CPLR, however, permits a judgment creditor to obtain a “renewal judgment,” which would operate to extend the lien of a money judgment on real property for an additional 10-year period.  CPLR § 5014.  Thus, CPLR § 5014 presently provides, in pertinent part:

Except as permitted by section 15-102 of the general obligations law, an action upon a money judgment entered in a court of the state may only be maintained between the original parties to the judgment where:

1. ten years have elapsed since the first docketing of the judgment;

* * *

An action may be commenced under subdivision one of this section during the year prior to the expiration of ten years since the first docketing of the judgment. The judgment in such action shall be designated a renewal judgment and shall be so docketed by the clerk. The lien of a renewal judgment shall take effect upon the expiration of ten years from the first docketing of the original judgment.  (Emphasis supplied.)

Prior to 1986 (before the italicized language above was added by the Legislature), CPLR § 5014 “was understood to preclude judgment creditors from bringing an action for a new lien until after the first 10–year period had elapsed, which necessarily created a ‘lien gap’ (see Brookhaven Mem. Hosp. v. Hoppe, 65 Misc.2d 1000, 319 N.Y.S.2d 564 [1971]), allowing other judgment creditors to ‘slip in with priority’ (see Siegel, Practice Commentaries, McKinney’s Cons. Laws of N.Y., Book 7B, CPLR C5014:2).”  Gletzer v. Harris, 51 A.D.3d 196, 200 (1^st Dep’t 2008), aff’d, 12 N.Y.3d 468 (2009).  The “lien gap” problem was “solve[d]” when an amendment to CPLR § 5014 was promulgated in which the above-italicized language was added to CPLR § 5014.  Gletzer, 51 A.D.3d at 200.

The plaintiff in Gletzer moved for a renewal judgment pursuant to CPLR § 5014 one day before his original lien expired and requested that, inter alia, supreme court grant the motion and issue a renewal judgment, nunc pro tunc, as of the expiration date of the original lien. Gletzer, 51 A.D.3d at 198.  Supreme court granted the renewal judgment, nunc pro tunc, several years later.  However, in the “lien gap” period – the time between the expiration of the original lien and the time that the renewal judgment was entered – two mortgage companies recorded mortgages against the property of Gletzer’s judgment debtor.  Gletzer, 51 A.D.3d at 199.  Supreme court also denied mortgagees’ motion for the vacatur of the nunc pro tunc treatment of the renewal judgment.  Gletzer, 51 A.D.3d at 199.  The appeals of Glatzer’s judgment debtor and the mortgagees were consolidated. 

As to the CPLR § 5014 issues, the Appellate Division noted that the intent of the amendment to CPLR § 5014 was “to eliminate the rule of Brookhaven, [supra.] by giving judgment creditors the opportunity to take action to renew their lien early enough to avoid a lien gap.”  Gletzer, 51 A.D.3d at 201.  However, the Court noted that “there is no indication, or any reason to believe, that it intended to preclude any possibility of even a brief lien gap, under all circumstances, or to protect the judgment creditor from the priority otherwise enjoyed by an intervening recorded lien.”  Gletzer, 51 A.D.3d at 199.  Indeed, the Appellate Division, held that mortgagees were entitled to rely on the results of lien searches conducted during the lien gap period in making their lending decisions.  Gletzer, 51 A.D.3d at 205.  

Thus, the Gletzer Appellate Division, inter alia, modified supreme court’s judgment “so as to deem the 1991 judgment to be renewed as of March 1, 2005, the date the renewal judgment was granted….”  Gletzer, 51 A.D.3d at 206.  The Appellate Division’s Order was affirmed by the Court of Appeals, which noted that the Appellate Division “concluded that the plain language of the statute does not eliminate all lien gaps [instead i]t was meant solely to provide a diligent creditor one year to reapply for an extension of the lien to avoid a gap.”  Gletzer, 12 N.Y.3d at 472.  In so doing, the Court of Appeals specifically rejected the notion of nunc pro tunc treatment of renewal judgments that would otherwise result in a lien gap.  Gletzer, 12 N.Y.3d at 475 – 76.  The Court of Appeals stated:

We thus conclude that those seeking to secure any interest in real property must be able to rely upon a public record to furnish full and complete information of any conveyances, liens or encumbrances affecting such property. They should not be penalized for failing to unearth an expired lien or not investigating the prospect that it might be subject to a pending renewal request. Additionally, nunc pro tunc treatment under these circumstances would be inimical to our State’s commitment to record notice based upon the certainty of a docketing system that alerts potential purchasers and lienholders to encumbrances upon real property.

Gletzer, 12 N.Y.3d at 477.

The Supreme Court of the State of New York, Westchester County, in Wilmington Sav. Fund Socy., FSB v. John (February 11, 2020), addressed the issue under CPLR § 5014 of “when does the lien of the renewal judgment become effective.”  The plaintiff in Wilmington filed a motion for summary judgment in lieu of complaint in which it sought a renewal judgment, nunc pro tunc.  The Wilmington court found that the plaintiff “made a prima facie showing of its entitlement to a renewal judgment by offering evidentiary proof that it was the original judgment creditor’s assignee, and that no part of the judgment has ever been satisfied.”  (Citation omitted.) Consistent with, and relying on, Gletzer, the Wilmington court reiterated that the renewal judgment is not entitled to retroactive application.  The Wilmington court, in addressing the Gletzer Courts’ analyses of when the renewal judgment takes effect, stated:

In reversing the motion court, the First Department deemed Gletzer’s renewal judgment “entered as of the date the relief was granted” (Gletzer v Harris, 51 AD3d at 206). Upon further appeal, the Court of Appeals, in answering the question as to whether a lien from a renewal judgment secured pursuant to CPLR 5014 for a second 10-year period takes effect nunc pro tunc on the expiration date of the original lien, held: 

Because CPLR 5014 does not provide for a renewal judgment to have retroactive effect to the original lien’s expiration date and because nunc pro tunc treatment is inappropriate where, as here, additional lenders relying on the public record acquired rights in the property, we hold that the renewal lien becomes effective when granted by Supreme Court (Gletzer v Harris, 12 NY3d at 470). 

(Emphasis in original.)  

The Wilmington court recognized that at the time the decision and order on the renewal judgment motion uploaded to NYSCEF, it “has not yet been submitted by the plaintiff to the Westchester County Clerk for entry.” Further, the renewal judgment is not “accessible by the public” “until the judgment is entered and docketed (which is done simultaneously) by the Westchester County Clerk.”  Accordingly, until “the renewal judgment is entered and docketed by the County Clerk” “any potential lender searching the records in Westchester County” “would have notice only of the already expired and not renewed … judgment.”

Thus, “the [Wilmington] court [found] that the plaintiff is entitled to a renewal judgment which lien shall be effective as of the date such renewal judgment is entered and docketed by the Westchester County Clerk